The Bare Necessities of Wholesale Magic

There are some bare necessities of wholesale to get you started on your path to selling your handmade soap & skincare products to retailers. After that, there are bonuses and extras, but they aren’t necessary to jump in with both feet!

What do I absolutely need to wholesale successfully?

You can start working your wholesale magic pretty quick, so let’s dive in:

To sell your products wholesale, you need to have a solid understanding of your COGS!

Not just a rough idea, not an educated guess, but a solid and thorough concrete number.

If you remember from the Wholesale Primer, your COGS are the cost of goods sold and it includes every single cost that goes into creating and selling your products. This includes your raw materials, packaging, labor, and overhead.

Your raw materials cost includes the straight cost of the ingredients, including the shipping cost. The packaging is the same, it is the cost of your product packaging components and the cost of having them shipped to you. Soapmaker 3 is great for getting a good handle on your raw materials and packaging costs.

The labor includes every associated labor cost, including adding shipments of ingredients to inventory (some include this in their raw materials + packaging costs, that’s fine – just make sure to count it), weighing and measuring components of a batch, making the batch of soap, cutting the batch of soap, and packaging the batch of soap.

In order to wholesale successfully, you have to know what you are spending money on, so you can price your products properly and make a profit. Otherwise, you may be enjoying a very expensive hobby. (Sadface.)

In order to fulfill wholesale orders with speed and efficiency, you need to know your production capacity.

And have a plan for scaling it!

(If you haven’t started masterbatching your soap production, I have the perfect eBook for you! My Introduction to Masterbatching is the ultimate guide to getting you on track to scale your production efficiently!)

If you approach Todd’s Natural Food Market and they want to purchase 100 bars of your best seller, can you deliver? Do you have it ready and on hand? Can you deliver it tomorrow? Next week? If not, can you produce it and deliver it in a reasonable amount of time?

You must know what you can and cannot produce, the timelines of production, and have a very real idea of the labor costs involved for your COGS. If you need to hire help, can you? If you need to outsource production, can you?

Do not forget your raw materials here – how long does it take you to get your hands on ingredients you need?! Have backup plans for supplies that are essential to your business, do not ever rely on a single supplier if you can help it. What if they discontinue it? What if they are out of stock? This is especially important for ingredients like fragrance oils. 😉

And the next step for successfully selling your handmade soap & skincare wholesale? A strategy, a game plan, & a way to keep the score.

You need to have a solid product line, you can’t make what you want when you want to. Customers come to develop favorites and expect that they can purchase them over and over. Every time you make a new product, you spend so much time developing it’s packaging, taking photographs, writing copy, analyzing COGS, and so much more. A solid product line allows you to more efficiently manage your time.

You need to know what type of retailers your perfect customer shops at so you don’t waste time chasing retailers that don’t fit your brand. Create a spreadsheet of potential accounts, and another for current accounts. Stalk them all. Without being creepy.

You need to have a detailed strategy and plan for how you handle the ordering process so that you can lay out terms that make sense for your biz. There are so many times I’ve seen soapmakers ask in a Facebook group about how to handle net terms, or short shipped orders, or requests for credits. Have your policies in place, and your plans for scenarios to the best of your abilities. It’s always a learning experience, but having a game plan upfront makes it so much easier.

And lastly, to wholesale your soap, you need to have a way to communicate information to buyers for ordering.

An example linesheet created with my Microsoft Word template

The absolutely best way to give information to potential buyers? A line sheet, or catalog and an order form. It’s pure wholesale magic right at it’s core.

While a beautifully designed line sheet or catalog can make landing new accounts a breeze, everyone starts somewhere. If you need to DIY, it can be as simple as laying out a line sheet in Microsoft Word. (You can snag our line sheet template in the Resource Library!)

There are a ton of articles out there on what to include in a line sheet, including these fab ones from around the web:

Do I have to do all these things to wholesale my handmade soap & skincare?

The short answer is no, no you don’t.

A lot of soapmakers wholesale without a detailed idea of who they are approaching, how to handle ordering, their production capacity, or line sheets. It’s not impossible to wholesale without these things, but they make it infinitely easier! Trust me.

Invest the time it takes to develop your wholesale program before diving in – it’s worth it.

Hey-ho, I'm the soapy founder of Modern Soapmaking, and I eat, breathe, and sleep soap. (Okay, I don't eat soap... that's gross.) My passion is in helping other soapmakers find their path, whether it's in the craft or as an entrepreneur. Maybe, I can help you find yours?

I have been working on my line sheet, almost done! Once this is all done, how do I present it? Meaning do you have custom folders made up with your logo or some other way to present your package? I need it to be cost effective (who doesn’t) and give a great first impression. Suggestions?

Hi Jenn! I personally do not use folders or other presentation materials with my wholesale materials. It’s an option and something you can do, but a well-designed linesheet or catalog in itself is a great first impression on it’s own! 🙂

Hi Kenna. God bless you for sharing your knowledge. It’s great stuff! I’m wondering why you decided to opt out of full-time production. Amathia had such a great line of products. Did you find difficulties with it, get bored with making soap day in day out, or was it more about inspired philanthropy and sharing your knowledge? I’m only asking because I’m curious what pitfalls there may be down the track for a soap manufacturer. Many thanks.

Hi Melissa! 🙂 I adore Amathia and I still retain all the intellectual property if I want to pursue it again at a later date. I found my passion shift from making products to helping others make and sell their products when I started Central Soapers Workshop in 2012/2013. I’m a huge believer in following your passion, and leaving Amathia on the backburner was the right move for me to concentrate my passions of helping others succeed right now! 🙂 Gratitude Soapery is all about making a difference outside of our industry and it’s always been important for me to find a way to give back, with Amathia gone, I was inspired to find another way to pursue this. 🙂

Oh, sorry I forgot about Gratitude Soapery! I’m such a scatterbrain since I had kids and I’ve been so focused on Modern Soapmaking stuff that it slipped my mind. Now I’m wondering how you do it all with 3 kids! I take my hat off to you.

Kenna – Thank you, thank you, thank you so much for all of these posts. I’m going into my first season of selling at a farmer’s market and I’m doing the prep work for opening up a wholesale account. Your post of COGS was so hopeful. Yesterday I ran the numbers and found out that with paying myself and overhead my costs are $2.50 per bar! Yikes! It really helped to hear that there are people in the world that are willing to pay $1.50-$1.75/oz. Thanks for that affirmation! One of the tricky things for us right now is that we are using all of our savings (which is a finite amount) for our startup costs. That means that we can’t afford to buy EO’s by the gallon or take advantage of ordering larger quantities at a discount. Are there any tricks to getting around this? Or do we just order in larger quantities as we grow? I appreciate you sharing all of your genius with the rest of us!

I’m so glad you realized that you were undercharging to pay yourself and grow your biz! If you adjust your prices to account for your real costs, you’ll naturally be able to grow that biz of yours.

But for now, yes! There is a way to get around that: co-ops! There are many soapmakers in the industry (myself included) who run co-ops on ingredients, which is basically a bulk group buy where a bunch of soapmakers pool together to buy an ingredient in bulk with the hostess splitting and sending out the product to everyone who bought in. It won’t get you all the way down to the costs of buying bulk for yourself as you’ll be paying a share of shipping to the host and then on to you, as well as packaging, but this should always add up to savings against your regular supply chains.

Footer

Ready to get your swagger on?

Get your hands on my weekly value-filled emails and snag my Soap Biz Success Plan as a bonus. You'll be struttin' your biz smarts all over the place in no time. (Say goodbye to being stuck in a rut; no more wasting time, money, and effort, superstar!)